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Just Energy Says Texas Weather Crisis Raises Going Concern Doubt, Delays Q3 Earnings

Retail energy provider Just Energy said the Texas Deep freeze, which spiked power prices to $9,000 per kilowatt hour, could cost it as much as $250 million.

Just Energy Group Inc.  (JE) - Get Just Energy Group Inc. Report shares plunged lower Monday after the retail energy provider warned that the extreme weather events in Texas, which lifted wholesale power prices to as high as $9,000 per kilowatt hour, could affect the group's ability to continue as a going concern. 

Toronto-based Just Energy said its expects a bottom line hit of at least $250 million to its current quarter earnings, which cover the three months ending in March without "corrective action by the Texas government".

"But the financial impact could change as additional information becomes available to the company," Just Energy said in a statement Monday. "Accordingly, the financial impact of the Weather Event on the company once known, could be materially adverse to the company’s liquidity and its ability to continue as a going concern."

Just Energy also said it would delay its third quarter earnings report, scheduled for Tuesday, until the end of the week.

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"The company is in discussions with its key stakeholders regarding the impact of the Weather Event and will provide an update as appropriate," Just Energy said.  

Just Energy's U.S. listed shares were marked 27% lower in early trading on the Nasdaq Monday to change hands at $4.22 each. 

Texas Governor Gregg Abbott said Sunday that the state's energy grid, which is run by the Electricity Reliability Council of Texas (ERCOT), is operating at full capacity following the severe cold weather that gripped the southwest region last week and left some 4 million residents without power.

Abbott also said the Texas Public Utilities Commission PUC) will issue a moratorium on energy companies seeking to disconnect customers, or collect outstanding bills, until state lawmakers investigate the grid's near failure.

“Our absolute top priority as a commission and a state is protecting electricity customers from the devastating effects of a storm that already affected their delivery of power,” PUC chairman DeAnn Walker said in a statement. “The order and directives are intended to be temporary, likely through the end of this week, to address the potential financial impacts that are especially challenging during this extremely difficult time.”